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A shoe just dropped in the talent management marketplace. Workday introduced Workday Learning, the company's new solution for learning management (LMS), career development, video content sharing, and video management. (Workday Learning is scheduled to be generally available in second half of 2016, with early availability starting this year.)

This is a significant announcement for several reasons, and I wanted to share some perspectives on the learning platform market and the potential impact of Workday's market entry.

The Learning Management Systems (LMS) Market: Big And Growing

Today the LMS market is over $2.6 billion in size and growing rapidly (more than 20% growth rate in 2014) as many companies replace their older training systems. The corporate LMS is typically used to administer and manage the complex business of corporate education, which includes class scheduling, e-learning and virtual training, compliance and regulatory tracking, career and professional development, sale of education products to customers and partners, as well as internal video sharing, expertise networks, and some knowledge management.

Because training is so complex and varies widely from company to company, there are many vendors. Some focus on compliance and global training; some focus on video and content management; others focus on professional development and knowledge sharing. Our research identified more than 300 vendors in the market, with a few dominant players (CornerstoneOnDemand, SumTotal, SAP, Oracle, and Saba) each with slightly over 10% market share.

These systems have become mission-critical to most large companies. In industries like financial services, health care, pharmaceuticals, and energy, the LMS manages mandatory compliance training. In large global companies the LMS manages career development programs, onboarding programs, leadership development programs, and functional training programs (IT, project management, quality, etc.). And as a place to store content, the LMS is a vast repository for videos, webcasts, documents, course materials, assessments, e-learning, and tests.

While the LMS market started out 20 years ago as a standalone software category, today most companies want their LMS integrated into their other talent management applications. So all the major LMS companies built out talent management suites to address this need.

The LMS Market Shift: From Learning Management To Learning

The LMS market has changed rapidly over the last few decades. As the following chart shows, the market evolved in four stages, following the evolution of learning and HR technology. In the 1980s the systems focused on classroom management: in the 1990s and early 2000s they shifted toward e-learning and online learning; over the last decade they've focused on integrated talent management and talent development; and today they are becoming digital learning platform: the consumer-like TV channel of corporate learning.

Fig 1: Evolution of the LMS Market (Bersin by Deloitte)

Each of these shifts has been driven by a change in technology, leading to new approaches to learning.

In the 1970s and 1980s we primarily learned in the classroom and through PC-based videos. The LMS was used for training administration and classroom scheduling.

In the 1990s we shifted to internet-based courseware, which was largely consisted of page-turning courses. Standards like AICC let us track progress through courseware so the LMS became an e-learning management system.

In the early 2000s the concepts of integrated talent management became popular, so vendors focused on integrating their LMS systems with talent applications.

And today, driven by mobile smartphones, bandwidth, social networking, and cameras everywhere, we learn through video, content sharing, MOOCs, and recommendations from others. The modern learning world is filled with expert-authored videos, expert blogs and articles, tweets, webcasts, and an ever-expanding marketplace of external (and internal) content. The LMS must become a true "learning system."